Rev. Rul. 81-70

1981-1 C.B. 389, 1981-9 I.R.B. 8.

                       Internal Revenue Service
                                 Revenue Ruling

                         ILLEGAL ALIEN; RESIDENT STATUS

                            Published: March 2, 1981

SECTION 871.--TAX ON NONRESIDENT ALIEN INDIVIDUALS, 26 CFR 1.871-2: Determining residence of alien individuals

  Illegal alien; resident status. The presumption of nonresidence provided in section 1.871-4(b) of the regulations may be rebutted in the case of an illegal alien who establishes strong community ties over an extended period of time.

ISSUE

  Is the presumption of nonresidence provided in section 1.871-4(b) of the Income Tax Regulations rebutted pursuant to section 1.871-4(c) in the case of an alien individual illegally present in the United States under the circumstances described below?

FACTS

  A and A's family illegally entered the United States from country Z in January, 1972.  A obtained permanent employment in state X and enrolled A's children in local schools.  After several months, A enrolled as a part-time student in a local college.  Over a period of years, A earned an undergraduate degree and later earned a graduate degree in dentistry.  Shortly thereafter, A purchased a home and established a dental practice in the community.  A is a member of a national dental association and other service organizations and social clubs in the community.  A, however, has never applied for legal residence or immigrant status in the United States.  A inquires whether A is subject to tax as a resident or nonresident alien for A's taxable year ending December 31, 1980.

LAW AND ANALYSIS

  Section 1.871-2(a) of the regulations provides that the term 'nonresident alien individual' means an individual whose residence is not within the United States and who is not a citizen of the United States.

  Section 1.871-2(b) of the regulations provides that an alien actually present in the United States who is not a mere transient or sojourner is a resident of the United States for purposes of federal income taxation. Whether an alien is a transient is determined by the alien's intentions with regard to the length and nature of the alien's stay.

  Section 1.871-4(b) of the regulations provides that an alien, by reason of his alienage, is presumed to be a nonresident alien.

  Section 1.871-4(c)(2)(iii) of the regulations provides that the presumption as to an alien's nonresidency may be overcome by proof of acts and statements of the alien showing a definite intention to acquire residence in the United States or showing that the alien's stay in the United States has been of such an extended nature as to constitute him a resident.

  The presumption of nonresidence in section 1.871-4(b) of the regulations is applicable to all aliens present in the United States, whether legally or illegally.  It is a rebuttable rather than conclusive presumption, as indicated by section 1.871-4(c). Thus, the presumption can be overcome by proof of acts and statements showing (1) a definite intention to reside in the United States permanently or (2) a stay of an extended nature.  See e.g., Marsman v. Commissioner, 205 F.2d 335 (4th Cir. 1953); Rev. Rul. 64-149, 1964-1 (Part I) C.B. 233, 235.  Such is the case in the factual situation presented here.  A's acts show a definite intention to reside in the United States on more than a temporary basis.  In addition, A's stay of almost 8 years, accompanied by service to and involvement in the community, show that A's stay is more than temporary, or that of a transient, and is of such an extended nature as to constitute A a resident for federal income tax purposes.

HOLDING

  The presumption of nonresidence provided in section 1.871-4(b) of the regulations is rebutted pursuant to section 1.871-4(c) in the case of an alien illegally present in the United States under the circumstances described above so as to constitute the alien a resident of the United States for federal income tax purposes.

Rev. Rul. 81-70, 1981-1 C.B. 389, 1981-9 I.R.B. 8.